Estimating Benefits for Effective Enforcement of Speed Reduction from Dichotomous-Choice CV

Abstract

We present an empirical estimation of the distribution of WTP foreffective speed restriction via implementation of local trafficcalming schemes. Random samples are drawn from the populations ofhouseholds (henceforth HHs) of three centres intersected by maintrunk roads with varying through traffic conditions. We estimatethe underlying WTP distributions from discrete-choice responsesto site-specific referendum contingent valuation studiesaccounting for zero-bidders. We then test the hypothesis ofdifferent distributions across villages. The statistical analysisconsists first of a parametric specification and then of atotally non-parametric one. Stated welfare changes for effectivespeed reduction are found to be sizeable and the parameters ofthe random utility models are plausibly related to differences inobjective speed measures across centres. The results appear toencourage the use of the referencum-CV method in the estimationof local public goods. In this case study the proposed publicproject would seem to pass the Kaldor-Hicks potentialcompensation test.